Businesses commonly rely on commercial financial companies to finance the purchase of products. Generally, customers are allowed 30 days of free financing by the finance company, with payments due on a specified day of the month, i.e., “commonized due date.” The conventional payment structure is referred to as scheduled payment plan, or SPP. The advantages of the scheduled payment plan for commercial customers are coordination and forecasting of all their payments. Customer save in administration costs when using the scheduled payment plan because they are making only fewer payments per month, as opposed to writing checks every day for every invoice received.
The disadvantages to the business customer are inherent in the nature of the scheduled payment plan. Since the customer's statement from the finance company typically arrives only once a month, the customers may not be aware of payments due for products they have ordered until they receive monthly statements from the finance company. As a result, the customer may not receive invoice information in time to pay the product invoice before its due date, consequently incurring late fees and interest charges. In the event the customer wishes to dispute an invoice, no easy or timely mechanism exists within the standard finance company construct for resolving the dispute.
The standard scheduled payment plan approach also has disadvantages for the finance company. For customers dealing in large numbers of products, the entry of customer invoices and monitoring of payments becomes labor intensive and thus expensive. Additional labor is required for mailing out invoices. The application of cash payments to accounts is also labor intensive and error prone since payments are manually posted to accounts.
For both the customer and the finance company, the ability to manage funds and move payments quickly is critical when dealing with large amounts of money. The standard finance company approach mails invoices to business customers and receives payments through the mail. This approach is slow and relatively inefficient, limiting the ability of the finance company and the business customer to manage their accounts on a timely basis.
Some finance companies address these deficiencies in the scheduled payment plan by providing account information on the Internet. Customers can access their accounts at the finance company's Web site and monitor debits and credits to their accounts. However, this approach still requires payment by mail, which is manually processed when it arrives at the finance company. In addition, the finance company decides when and which of the customer's invoices will be paid. For many customers, the current approach to company finance does not allow the flexibility required to maximize the use of the company's resources and funding.
What is needed is a finance company model or system that allows the business customer to select which invoices from a supplier to pay, defer, or not pay, which invoices to partially pay, and which invoices to finance fully or partially over time. In addition, the business customer needs to be able to select a method of payment such as cash, wire transfer, or credit. In addition, a system is needed that allows both the supplier and business customer a convenient and timely method for disputing invoices and payments. The need for such a system has heretofore remained unsatisfied.